Yesterday, Bitcoin and nearly all other cryptocurrencies on the market soared higher following the latest Ripple (XRP) news. This upswing came on the heels of a slightly lower-than-expected CPI print this week, with the SPX closing over 4,500. Speculation in the derivatives market played a significant role, as evidenced by rising open interest alongside a much higher perpetual funding rate, even in the absence of a substantial change in spot buying (as per aggregated cumulative volume delta CVD levels).
BVIV, the Volmex Bitcoin implied volatility index, rose from 2023 lows of 42.6 to 48.7, indicating a resurgence of volatility in light of the XRP ruling. This surge coincided with the crypto complex receiving a large bid, essentially all at once. As a result, Bitcoin dominance, while admittedly a flawed metric, declined, reflecting an increased optimism amongst market participants about the future of altcoins, due in part to the interpretation of the SEC ruling.
Our view remains that there is a strong case for a local top area here and a speculative-driven rally like this one may indeed signify that local top. Most bid and ask liquidity positions Bitcoin in a $30,000 to $32,000 range. Holding $31,000 is a key area for any further retests higher and breaking above $32,500 is significant for another bullish move.
While Bitcoin-specific implied and realized volatility remains historically subdued, it’s important to consider these measures in relation to broader market volatility. Despite the low volatility in the Bitcoin market, one must bear in mind that implied volatility for Bitcoin one month forward is currently 3.5 times that of expected volatility in equity markets.
The majority of dashboard indicators remain similar to last week. The GBTC discount has settled around 30%, the STH Realized Price has moved up to $28,000 and the overall realized price has climbed higher to $20,400. Bitcoin investment inflows were significantly positive for last week, while volatility (VIX) remains subdued and the U.S. dollar (DXY) flirts with breaking below a key 100 level during this summer period.
Earlier this week in the Market Keys, we highlighted the recent significant divergence in higher SPX performance and contracting liquidity, brought about by the combination of global central bank balance sheets and U.S. Net Liquidity. These have been useful models to explain asset performance and trends since 2020. A significant divergence here is another reason to exercise caution in our view.
We will send an updated password for the live dashboards every Thursday along with the Market snapshot and summary. The live dashboards are currently optimized for desktop. Viewing on mobile may not be ideal at this time.
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PRO Market & Mining Dashboards: 7/14/2023
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Market Dashboard
Market Summary
Yesterday, Bitcoin and nearly all other cryptocurrencies on the market soared higher following the latest Ripple (XRP) news. This upswing came on the heels of a slightly lower-than-expected CPI print this week, with the SPX closing over 4,500. Speculation in the derivatives market played a significant role, as evidenced by rising open interest alongside a much higher perpetual funding rate, even in the absence of a substantial change in spot buying (as per aggregated cumulative volume delta CVD levels).
BVIV, the Volmex Bitcoin implied volatility index, rose from 2023 lows of 42.6 to 48.7, indicating a resurgence of volatility in light of the XRP ruling. This surge coincided with the crypto complex receiving a large bid, essentially all at once. As a result, Bitcoin dominance, while admittedly a flawed metric, declined, reflecting an increased optimism amongst market participants about the future of altcoins, due in part to the interpretation of the SEC ruling.
Our view remains that there is a strong case for a local top area here and a speculative-driven rally like this one may indeed signify that local top. Most bid and ask liquidity positions Bitcoin in a $30,000 to $32,000 range. Holding $31,000 is a key area for any further retests higher and breaking above $32,500 is significant for another bullish move.
While Bitcoin-specific implied and realized volatility remains historically subdued, it’s important to consider these measures in relation to broader market volatility. Despite the low volatility in the Bitcoin market, one must bear in mind that implied volatility for Bitcoin one month forward is currently 3.5 times that of expected volatility in equity markets.
The majority of dashboard indicators remain similar to last week. The GBTC discount has settled around 30%, the STH Realized Price has moved up to $28,000 and the overall realized price has climbed higher to $20,400. Bitcoin investment inflows were significantly positive for last week, while volatility (VIX) remains subdued and the U.S. dollar (DXY) flirts with breaking below a key 100 level during this summer period.
Earlier this week in the Market Keys, we highlighted the recent significant divergence in higher SPX performance and contracting liquidity, brought about by the combination of global central bank balance sheets and U.S. Net Liquidity. These have been useful models to explain asset performance and trends since 2020. A significant divergence here is another reason to exercise caution in our view.
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We will send an updated password for the live dashboards every Thursday along with the Market snapshot and summary. The live dashboards are currently optimized for desktop. Viewing on mobile may not be ideal at this time.
Not financial advice.